Illegal $2bn Excess Crude Funds Withdrawal: FAAC Says Okonjo-Iweala Is On Her Own

Commissioners of Finance and Accountants General of the 36 states of the federation on Tuesday distanced themselves from claims by the former Minister of Finance, Ngozi Okonjo-Iweala, that they were part of the decision to withdraw and spend $2bn from Nigeria’s excess crude oil revenue account last December.

Edo State governor, Adams Oshiomhole, and his Kaduna State counterpart, Nasir El Rufai, had, after the National Economic Council (NEC) meeting in Abuja on Tuesday last week, accused Mrs. Okonjo-Iweala of unilaterally approving the withdrawal of about $2.1 bn from the $4.1 bn left in the Excess Crude Account (ECA) last November “without authorization”.

But in a swift reaction, the former Minister had vehemently rejected the accusation, describing allegations linking her to the allegations as “false, malicious and totally without foundation”.

Mrs. Okonjo-Iweala’s reaction, conveyed through a statement by her Media Adviser, Paul Nwabuikwu, said all expenditures from the ECA “were discussed at meetings of the Federation Accounts Allocation Committee (FAAC) attended by finance commissioners from the 36 states”.

“It is curious that in their desperation to use the esteemed National Economic Council for political and personal vendetta, the persons behind these allegations acted as if the constitutionally recognized FAAC, a potent expression of Nigeria’s fiscal federalism, does not exist,” she said.

But in a stern reaction on Tuesday in Abuja, members of the FAAC, under the aegis of the Forum of Commissioners of Finance, disowned the former minister, describing her claim as “misleading and far from the fact”.

“It has come to our notice the statement credited to the former Coordinating Minister of the Economy and Honorable Minister of Finance, Dr. Ngozi Okonjo-Iweala, that the Federation Account Allocation Committee (FAAC) approved the withdrawal from Excess Crude (Foreign) Account the sum of Two Billion U.S. Dollar ($2,000,000,000.00),” the commissioner said.

“This statement is far from the fact and is misleading,” the statement said.

The FAAC meeting for November 2014 ended in confusion when the then Minister of State for Finance, Bashir Yuguda, could not explain how the balance in the ECA had dropped from $4.1 bn at the end of October to $3.1 bn.

Prior to the October FAAC meeting, Mrs. Okonjo-Iweala had told reporters that the balance of the ECA stood at $4.11bn, while the country’s external reserves rose from $36.6bn in June to $39.48billion as at October 16.

Regardless, the then Chairman of the Forum of State Commissioners of Finance and former Ebonyi State Commissioner of Finance, Timothy Odaah, had denied knowledge of any decision to withdraw from the account, insisting that none of its members was aware of the withdrawal.

“No state knew how the $1 bn difference reported in the Excess Crude Account balance, between October and November, came about,” Mr. Odaah told reporters then. “The discrepancy has been noted for discussion at the next FAAC meeting. It calls to question how transparent the management of the excess crude revenues has been.”

Till the end of his tenure, Mr. Odaah, who later claimed reconciliation was ongoing with the Finance Minister, did not reveal his findings.

However, several months later, Mr. Oshiomhole stirred the controversy afresh last week with the allegation that the former minister was economical with the truth about the country’s finances.

Mr. Oshiomhole had lambasted Mrs. Okonjo-Iweala over her claims that Nigerians knew what the three tiers of government usually collect through the State Finance Commissioners who usually attend the monthly FAAC meetings.

The power to take money from the ECA, Mr. Oshiomhole argued, is vested in the NEC, an institution created by the constitution, and not State Finance Commissioners, who are not known by the constitution.

In disowning Mrs. Okonjo-Iweala, the Commissioners’ Forum pointed out that the law setting up FAAC, which predates the ECA, “cannot approve withdrawal and has not done so in the past.”

If anything, the Commissioners said, records of FAAC meetings show that members have always queried the activities on the ECA, and therefore did not decide any withdrawal.

Although the Commissioners said they observed the withdrawal of $2bn from the ECA in December 2014, the then Minister of State Finance and Chairman of FAAC, Mr. Yuguda, had explained during plenary that approval came from former President Goodluck Jonathan.

The withdrawals were to help pay subsidy claims to oil marketers, who had threaten to stop importing petroleum products.

“FAAC did not and could not have approved, nor took the decision to withdraw the sum of Two Billion U.S. Dollar ($2,000,000,000.00) from the Excess Crude Account,” the Commissioners said.